India's Northeast and Southeast Asia - Institute of Peace and Conflict ...

IPCS ISSUE BRIEF
NO 106
JUNE 2009
India’s Northeast and Southeast Asia
Chinese Interests and Strategies
Prof. Srikanth Kondapalli
Center for Chinese Studies, Jawaharlal Nehru University, New Delhi
Unlike in the past, China’s interests and strategies
toward Indian Northeast and Southeast Asia are
becoming more comprehensive and complex in
nature. While China viewed these two regions
from minimalist foreign and security perspectives
earlier, it is expanding these interests and
strategies to include maximalist goals and nontraditional
security aspects. Triggers for this
change in China’s stance are located in three
decades of reform and opening up policies,
enhancing comprehensive national strength of
the country as a part of its big power ambitions,
urge for expanding relations from the previous
bilateral to multilateral networks, and the like.
While there are several nuances and mixed
outcomes on several specific issues related to
Indian Northeast and Southeast Asia, , it can be
argued that China’s interests and strategies
toward these two regions are expanding.
Another caveat is that due to the diversified
nature of the two regions, broader aspects of
China’s interests and strategies are considered in
this paper.
I
CHINA & SOUTHEAST ASIA
The significance of the Southeast Asian region for
China is obvious in geographical, historical,
cultural, economic, and strategic aspects.
Geographical proximity, sharing of land and
maritime borders, successive migrations of people
across the borders for centuries, economic
relations, religious contacts, etc. have facilitated
growing political cooperation and/or competitive
trends in the region. China’s Yunnan and Guangxi
provinces share land borders with Myanmar,
Laos, and Vietnam for about 4,000 kilometres
while its maritime borders are with Philippines,
Vietnam, Malaysia, and Brunei. Southeast Asia is
straddled between some of the most significant
economic growth areas of East and South Asia,
important sea lanes of communication and
chokepoints are located in the region with its
obvious impact on the flow of global and regional
merchandise and energy resources.
China’s maximalist approach in Southeast Asia is for
political dominance of the region by replacing US/
Japanese influence in the long run as that would
constitute the building blocks toward becoming a
major power. Chinese close politico-military tie-ups
with Myanmar, military cooperation with other
countries including arms export, aid, joint exercises,
etc; military build-up, especially the power
projection forces like the long-range aviation, naval
forces, and marine corps and active diplomatic
and political thrust in the region form the sinews of
this approach. After 12 years, China sent ships to
Indonesia in March 2007. China has also increased
cooperation with ASEAN on issues related to
pandemics like SARS and avian bird flu. In March
2007, it undertook tests with several ASEAN countries
on bird flu. Again, China provided aid of about $1.5
million in early 2006 to the Philippines military to
counter the “communist rebels”.
A series of policy initiatives have been taken by
China to engage the Southeast Asian region to
encompass confidence building measures at the
bilateral and multilateral levels which includes highlevel
political and military visits, active participation
in regional dialogue mechanisms, enhancing
further economic and trade relations, etc. it is
analysed that of all the forces political, economic,
military and cultural China has been successful in
the political sphere in convincing the ASEAN
countries to have a favourable view of China in the
recent period (Jingyi 2007).
Southeast Asia Research Programme (SEARP)
Institute of Peace and Conflict Studies, New Delhi
developing an alternative framework for peace and security in the region

INDIA’S NORTHEAST AND SOUTHEAST ASIA
PAGE 2
By 2002, China signed declarations of cooperation
with the ASEAN and has either solved or in the
process of solving land and maritime disputes.
While such “normalisation” of relations between
China and Southeast Asian countries has several
other facets and differences, certain long-term
understanding between the two is being worked
out. China concluded a FTA with the ASEAN that is
to be in place between 2010 and 2012, signed a
treaty of amity and cooperation and tripartite
agreement with Vietnam and Philippines on South
China Sea dispute, initiated defence cooperative
measures, etc. China assiduously kept away the
US from the late 2005 Kuala Lumpur, January 2007
Cebu and Singapore meetings of the East Asian
Summit, while its initial efforts to keep away India
and others were unsuccessful due to the pressures
of Singapore and Japan.
China-ASEAN trade is more than $150 billion,
making China the ASEAN’s fifth largest trading
partner and ASEAN the sixth largest trading
partner for China. To facilitate further trade
between the two, China and the ASEAN countries
have agreed to give shape to the 2000 proposal
and set up an FTA in late 2002. If realised by 2010
(for the older members of ASEAN and 2015 for its
“new” members), this would be the world’s
biggest such zone, with estimates of a combined
market of 1.7 billion people, regional GDP of $2
trillion and international trade worth $1.2 trillion,
that would place FTA next only to the North
American Free Trade Area and the European
Union. It is proposed to remove all tariff and nontariff
barriers to goods and services, and provide
for preferential treatment to the “new” ASEAN
members so that they could catch up
economically with the rest. The next substantive
step came in July 2005, when China-ASEAN
agreed to implement goods trade agreement. In
addition to reduction in tariffs in 2005, next year
witnessed signing of free trade deals. Further, in
January 2007, both agreed to cut barriers to trade
in services such as transport, tourism, and
telecommunications.
Another issue is the energy and trade
dependence of China on Southeast Asia. This issue
China’s maximalist approach in Southeast Asia
is for political dominance of the region by
replacing US/Japanese influence in the long run
as that would constitute the building blocks
toward becoming a major power.
has a potential to divide both India and China in
the long term. Several Chinese reports indicate
the concerns on Chinese dependence on the seal
lanes of communications in Southeast Asia,
specifically Straits of Malacca’s. In 2008 China
imported about 180 million tonnes of oil, nearly 80
percent of which passed through these Straits. In
addition, burgeoning trade with South Asian and
other countries is largely dependent on these
Straits. Nearly 25 percent of global shipping passes
through the South China Sea. Any disruptions to
these supply lines could drastically affect the oil
prices but also the economies of several countries.
China is exploring alternate routes like access to
the Indian Ocean through Myanmar. China
concluded defence agreement with Malaysia
and has been actively pursuing a “string of pearls”
strategy in the Indian Ocean Region and
contiguous areas. However, some Chinese do
recognise the Indian role in stabilising the situation.
there is a possibility of cooperating with India in
the fields of intelligence and technology to
mitigate the challenges posed in the Straits.
(Renfei 2004). Due to this, China conducted joint
naval operations with India in November 2003 at
Shanghai, December 2005 at Cochin, and regular
port calls are being explored such as the Indian
Naval visits to Qingdao in April 2007. Some believe
that the launch of “string of pearls” strategy by
China is to some extent linked to India’s Look East
Policy (Khurana 2008). Besides, the Indian policy of
building a joint command at Andaman & Nicobar
Islands has some bearing on the Chinese activity
in Southeast Asian region (Chaudhary 2007).
II
CHINA & INDIA’S NORTHEAST
Distinct from the Southeast Region is the Indian
Northeast, which is also contiguous to the southwestern
regions of China. China’s interests and
strategies differ here on many issues, but
fundamentally, sovereignty clashes over
Arunachal Pradesh, national security concerns
over indigenous peoples living in contiguous
territories, etc remain similar. China’s interests in
this region are broadly related to expanding
physical connectivity, gaining access to the Indian
Ocean, mitigating energy contingencies, and
evolving interdependencies for stabilising remote
regions in the absence of progress in border talks
with India. As a relatively more developed region,
South-western portions of China could then have
attained commanding position in this area. China
had been assiduously expanding bilateral and
multilateral interactions in the region towards
these objectives.
IPCS ISSUE BRIEF

NO 106
PAGE 3
In order to realise this, China spearheaded in
August 1999 the Kunming Initiative (Bangladesh-
China-India-Myanmar grouping BCIM) with
delegates from China, India, Myanmar and
Bangladesh participating. Subsequently, meetings
were held at the respective capitals of these
countries focusing on infrastructure development
projects, tourism, economic development, etc.
While China, Myanmar and Bangladesh
appeared to stress Track 1 level, India prefers a
Track 2 dialogue process underling the latter’s
reservations.
The BCIM area is about 2.12 million sq. km. (of
which the Indian northeast is about 255,000 sq.
km) with a population of about 400 million (of
which there were about 30 million in the Indian
north-east) and abundant natural resources
connecting the under-developed markets of the
Indian sub-continent with China and South East
Asia. The “complementary” role of Chinese south
western resources (metallurgy, chemical,
electromechanical, textile, tobacco, paper
making, etc) with that of the Indian northeast
potential (in minerals, agriculture, aquaculture
and electronics), Myanmar (land, forests, oil,
precious stones) and Bangladesh (natural gas,
coal, water resources, garments) are stressed in
this grouping.
Domestic business and political considerations in
China preceded the BCIM proposal. Chinese
south-western provinces of Sichuan and Yunnan
are in the throes of modernizing their economies.
However the Sichuan initiative was lost (along with
nearly 5 million migrant labourers) to the Special
Economic Zones in the South-eastern Coastal
Regions which is suitable for the export-oriented
economic model. Nevertheless, following the
current drive to open up the western regions the
investment climate has been slowly shifting
towards these south-western provinces. In
addition, the State Owned Enterprises are either
being consolidated into large groupings or are
being sold to private entrepreneurs in the process
of marketization. A large private entrepreneurs’
exhibition was held at Kunming in 2001 for further
development of the region. In this context, a
railway line proposal linking interior south-western
provinces to the nearest coastal regions
(Myanmar, etc) for further export was made in
1995 at the National People’s Congress in Beijing
(coincidentally after China’s military Logistics
Director Gen. Zhao Nanqi questioned whether
Indian Ocean is India’s ocean in 1993!). It was
argued that a railway line would be able to
expand trade volume, especially in iron and
phosphorous imports, as such current trade
(conducted by the medium and low level trading
China’s interests and strategies in India’s
Northeast differ on many issues, but
fundamentally, sovereignty clashes over
Arunachal Pradesh, national security concerns
over indigenous peoples living in contiguous
territories, etc remain similar
companies) is uneconomical by sea. Close
economic and political cooperation between
China and Myanmar resulted in developing roads
and waterways from Yunnan to the Indian Ocean
through the Irrawaddy River. Two railway routes
identified include: Dali (Yunnan)- Tengchong and
Myitkyina (Myanmar)- Ledo (India); and Xiangyun
and Ruili (Yunnan) - Lashio and Mandalay
(Myanmar) - Chittagong and Dhaka (Bangladesh)
– Calcutta (India).
The roadway construction project plans include
the following: 1,472 km Ruili (Yunnan)- Bamuo to
Rangoon (Myanmar); 540 km Heinnitang to
Myitkyina- Stilwell Raod to Ledo (India); 730 km
Ruili to Bamuo and Myitkyina to Stilwell Road to
Ledo; 770 km Ruili to Bamuo and Tamu (Myanmar)
to Imphal (India); Nagaland (India) – Myanmar;
and India-China road - 200 kms of the Gongshang
county (Yunnan) to Gecha county (Tibet) [built by
1999] and about 200 kms from Chayu county
(Tibet) to Lido (India) [incomplete]. The waterways
projects include: Through Ilowai River from Yunnan
to Muse to Bamuo port [length 1,563 km. and
width 600 meters; handling capacity 3.9 million
tons] in Myanmar.
Chinese officials assume that this economic
cooperation would lead to “unity of the
developing countries and [their] joint fight against
hegemonies” and contribute to “establishing the
new-multi-polar world order and safeguard
[emphasis added] the peace and stability of Asia
and the world”. Upon the realization of the
economic benefits flowing from these
cooperative efforts, the four countries, according
to Lai Xiaorong, are to set up a “companionship
facing the 21st century”. In this context, an Asian
Forum was formed at Bo Ao in Hainan Province in
2001 (attended by other members like Myanmar,
Bangladesh, Pakistan and Nepal, though Indian
Embassy officials at Beijing or New Delhi ignored
the meeting initially). Broadly, this framework fits
into the Chinese government’s overall strategic
considerations of complete “normalization” in all
fields of economic, social, and political aspects
prior to solving the border problem with India.
Development of infrastructure, especially transport
routes, have been one of the crucial aspects of
SOUTHEAST ASIA RESEARCH PROGRAMME (SEARP)

INDIA’S NORTHEAST AND SOUTHEAST ASIA PAGE 4
the BCIM agenda. The Trans Asian Highway (TAH)
was conceived in 1960 and has about 25 member
countries with three (including Russia and Korea)
expected to join in the near future. Its length is
about 15,000 km. The Trans Asian Railway (TAR)
was conceived in 1959. However both TAH and
TAR faced problems with the outbreak of
Vietnam, Cambodian, Iran, and Iraq wars. A fresh
impetus was given in the 1980s. However, BCIM
has proposed several alternate routes from the
one existing but under repair or at places missing.
Bangladesh has proposed a short route that
reduces the railway line by about 400 km from
Kunming via Imphal to Dhaka. Huge investments
are required either to construct or upgrade the
TAH/TAR. As there is no significant trade in this
region, the infrastructure cost may act as a
deterrent for its further progress. Other related
projects include those connecting to Southeast
Asia: Kunming to Singapore; Bangkok highway
from Kunming (to be built by 2005); Lunming to
Laos, etc. In this context the Indian government
has shown some interest in the infrastructure
development projects. The Shukla Commission
Report [“Transforming the Northeast”] of March
1977 advocated the concept of constructing a
Trans-Asian highway and railway linking Indian
northeast with China through Myanmar. The BRO
has constructed the 160 km Tamu-Kalewa-
Kalemayo road at a cost of Rs 92 crores
connecting Myanmar.
Trade that follows from the construction of
transport routes is another area of concern for the
BCIM. The official trade figures among these
countries reveal a definite rise. For instance, Indo–
Myanmmar trade increased from Rs 444 cr in 1993-
94 to about $995 million in 2008. Similarly, Indo-
Bangladesh trade increased from Rs 1050 cr in
1992-93 to $3.6 billion in 2008 and India-China
trade from a nominal $ 3.5 billion in 2001 reached
$50 billion in 2008. In the approximate border
trade figures there has been significant unofficial
trade between India-Myanmar and Bangladesh.
Through Moreh to Myanmmar the unofficial trade
figures are about Rs 2000 cr per annum, Champai
and Lungwah to Myanmmar is about Rs 500 cr
and 100 cr respectively and through West Bengal
and Tripura to Bangladesh its Rs 1165 crores.
IV
CONCLUSIONS
China is today facing several bottlenecks in
pursuing its interests in Southeast Asia and in
Northeast India. As mentioned earlier in this article,
sovereignty factor had been important for the
relative stalemate between China and these
countries. Due to differences between the ASEAN
members, China had been so far able to make
some headway on South China Sea dispute. Not
much progress have achieved in the Indian
Northeast case due to security concerns of the
Indian establishment as well as non-resolution of
border disputes. While the local government in
Arunachal Pradesh had suggested opening up
border trade points with Tibet, this was not
acceptable to China. On the other hand, India is
wary of the dependencies of the Northeast
Region given the relatively industrialised
Southwestern Regions of China. In this situation,
India had proposed direct links with Southeast Asia
(through Myanmar) or through the maritime
dimensions rather than linking up with China. On
the other hand, China has been lukewarm to the
Indian proposals for pan-Asian FTA as this might
enhance Japan, Singapore, and other countries’
leverages. Overall, despite the prospects for
increasing trade and economic development,
China’s interactions with Southeast Asia and
Indian northeast are fuelling concerns in some
quarters of these regions.
REFERENCES
Zhang Lianfu and Pei Zhengxuan “21 shiji de Zhongguo
yu Dongmeng guojia guanxi jiyu, tiaozhan,
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prospects] Chaohu xueyan xuebao [Chaohu College
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Xu Jingyi. “Lengzhan hou Zhongguo zai Dongnanya diqu
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“ASEAN, China agree to cut trade barriers” http://
money.netscape.com/story/2007/01/14/asean-chinaagree-to-cut-trade-barriers
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SOUTHEAST ASIA
RESEARCH PROGRAMME (SEARP)
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